US pre-open: Stocks to drop again as Sino-US relations sour
US stock futures pointed to more losses on Wall Street on Tuesday as escalating trade tensions between the US and China hit sentiment.
At 1120 BST, Dow Jones Industrial Average and S&P 500 futures were down 0.5%, while Nasdaq futures were 0.6% lower.
Investors were likely to still be mulling tweets over the weekend from US President Trump, who threatened to raise tariffs on $200bn of Chinese goods to 25% from 10% as early as Friday. This threat was confirmed on Monday by US Trade Representative Robert Lighthizer, as he and Treasury Secretary Steve Mnuchin accused China of reneging on its commitments in trade talks.
Despite all the wrangling, talks between the US and China are still due to take place later this week in Washington.
James Hughes, chief market analyst at Axi Trader, said: "Wall Street is evidently struggling to find direction right now as the market attempts to digest the implications of further tariff increases on Chinese imports. There may however be a degree of gamesmanship in play here as negotiators in Washington attempt to hammer out the best possible compromise, although current suggestions are that major US indices will open in the red, rather than extending the recovery which was seen through much of yesterday’s trade and was extended by futures after the closing bell.
"The long tail of earnings season continues, although some highlights are set to include AB InBev, alongside maiden numbers from recently IPO’d Lyft. With a number of public offers being tabled right now, including Uber and WeWork, earnings from the ride share firm could well have some wide-reaching influence.
"JOLT job openings will be in focus shortly after the opening bell and after Friday’s impressive build in payrolls, another upbeat number should be seen here. However this would suggest that any shortfall could be an early warning of problems ahead and lead to fresh calls for the Fed to take an easier line over monetary policy."
Lyft is due to report its first earnings as a public company after the opening bell, while AB InBev, Mylan and Western Union are also slated to report quarterly numbers.
Elsewhere, Anadarko Petroleum could be in focus after it said that a revised bid from Occidental Petroleum constituted a "superior proposal" to the offer it received and agreed with Chevron. Anadarko said it now plans to terminate its agreement with Chevron and sell its business to Occidental.